I follow the local Extinction Rebellion (XR) Chapter on Facebook and someone legitimately raised some doubts about the goal of getting to zero carbon (i.e. long term net zero carbon emissions) by 2025, the second demand of XR. This is what I wrote in response:
Thanks for speaking your mind. I think we have to welcome doubts and questions as much as certainty and zealousness. Doubt and the ability to speak of doubts is essential to a free society. I certainly welcome you speaking up - though clearly you were worried about the reception you would get. And that last gives me a bit of concern.
And here's my answer to your conundrum. I don't know how we'll do it. I don't think anyone does know at the moment. Extinction Rebellion is not proposing a program which gets us there. It is proposing that we hold citizen's assemblies to figure it out.
In terms of optimism, I would like the offer a story from Delhi, one of the most polluted cities in the world. In 1998 the Indian Supreme Court order that all public transport and all taxis (small auto-rickshaws make up a huge proportion of the traffic in Delhi) must be converted to CNG within two years.
CNG - compressed natural gas - is not a zero emission fuel, but it produces substantially fewer emissions. And being India, of course, it took longer than 2 years to get every vehicle converted. But most vehicles were converted and it made a substantial difference to air quality. When I visited in 2009 Delhi was still polluted, but the air was much cleaner than it had been.
As far as I can see we simple lack the will. If I were to attend a citizen's assembly, here is what I would suggest to get us on target:
* All new government vehicles zero emissions immediately .
* All new buses and taxis zero emissions within 2 years.
* Implement congestion charging in all major cities combined with extended ultra low emission zones.
* Deregulate micro generation and reinstitute buying surplus for the national grid.
* Additional taxes on all international flights - incoming and outgoing - to be sure that the cost of flying reflects the cost to the planet.
* Renationalise railways and rationalise fare structure to make trains competitive with air travel.
* Immediately ban fracking and seek damages from those who pursued it.
* Prioritise and expedite the building of two (or more) new thorium-based nuclear power stations (thorium almost as efficient and waste is less of a problem). All new reactors to use the same design and have interchangeable parts.
* Commission Tesla to make us several whacking-great batteries (as in South Australia) to store solar and wind based power for non-generating periods.
* Step up programs to insulate houses that have not been upgraded. Raise standards on new builds.
* I would begin lawsuits to hold oil companies to account for their role in climate change denial with a view to recovering substantial amounts of wealth to reinvest in green tech.
* I would seek to reforest where possible and to reflood wetlands (which are even better carbon sinks).
If elected I would also institute a Robin Hood Tax on all capital transactions - money cannot simply flee the country anymore. I would tax land so that rates of income and corporation taxes could be lowered - wealth is concentrated in land and mostly escapes taxation. I would introduce a tax on polluters and again lower income and corporation taxes. I would ban non-UK residents from owning residential property (which is the root of the housing crisis). I would also hold a modern debt jubilee: i.e. every person in the UK to be given between £5,000 and 10,000 with the understanding that any debts must be paid down before it can be spent (paid for by a government bond issue). And make personal credit harder to get from banks. We need household spending to drop below household income.
Just personally, I'd revoke Article 50 and begin aggressively arguing for reform of the EU away from Neoliberal ideology towards something more pragmatic. I would insist that the IMF and World Banks be similarly reformed away from Neoliberalism. Economic liberalism was a failure the first time around and it's a failure this time too.
This is based on many years of thinking about how to better run the UK/World economy and what I see as the best advice from heterodox economists. This is my version of the Green New Deal.
I believe it would create an economic stimulus to help us fund the transition to zero carbon. And I think that if we were to do all this, along with the ideas that other people come up with, we could get close to the target in the time required. The UK could easily become the world's first zero carbon nation and that would give us meaning and purpose. And we could export our success and help other nations achieve what we have.
After that we will need to look at zero growth or perhaps even shrinking the economy to lessen the load on Gaia. But one battle at a time.
26 Apr 2019
24 Apr 2019
Why Did We Abandon Classical Liberalism?
From the Encyclopedia Britannica (16th Ed. Vo. 27, p.425):
So the problems with classical liberalism was that it concentrated wealth in the hands of an elite and this elite misused the power this gave them. Let me put this in own words.
By the end of the 19th century, some unforeseen but serious consequences of the Industrial Revolution in Europe and North America had produced a deepening disenchantment with the principal economic basis of classical liberalism—the ideal of a market economy. The main problem was that the profit system had concentrated vast wealth in the hands of a relatively small number of industrialists and financiers, with several adverse consequences. First, great masses of people failed to benefit from the wealth flowing from factories and lived in poverty in vast slums. Second, because the greatly expanded system of production created many goods and services that people often could not afford to buy, markets became glutted and the system periodically came to a near halt in periods of stagnation that came to be called depressions. Finally, those who owned or managed the means of production had acquired enormous economic power that they used to influence and control government, to manipulate an inchoate electorate, to limit competition, and to obstruct substantive social reform. In short, some of the same forces that had once released the productive energies of Western society now restrained them; some of the very energies that had demolished the power of despots now nourished a new despotism.
So the problems with classical liberalism was that it concentrated wealth in the hands of an elite and this elite misused the power this gave them. Let me put this in own words.
- Most people did not benefit. Poverty was widespread and many people lived in slums, with all the accompanying social problems such as diseases and substance abuse. There was child labour and many people died in the factories.
- The system of free trade lead to cycles of boom and bust. Left to itself the market is subject to extreme fluctuations. Some decades later, John Maynard Keynes showed that government investment during these periods reduced the severity and length of these periods.
- Finally the government was captured by the wealthy interests, partly through lobbying, but mainly through rich people gaining party nominations and becoming representatives. Wealthy men also formed a series of exclusive networks based on such commonalities as where they went to school through which they promoted each others and excluded others.
These problems helped to give birth to the new liberalism in which the state took a role in helping the poor to help themselves. Liberalism itself abandoned the free market ideology because it was destructive to society and created a form of government that was not concerned with liberty, but which rather tended towards a tyranny of the minority.
And when Milton Friedman and Friedrich von Hayek revived classical liberalism, creating neoclassical liberalism or neoliberalism, they ignored this history. Indeed, quite against the facts of history Hayek argued in 1944 that redistribution of wealth lead inevitably to totalitarianism. And subsequent history has shown that this is not true.
Neoliberalism became the dominant political ideology of the world. Poverty decreased in the third world but increased in the first. Economic recessions came thick and fast, with the global financial crisis being the worst since the Great Depression. And government has been captured by a wealthy elite.
But worse, this time around, is the existential threat from the destruction that large corporations and governments have wrecked on the environment. Pollution, extreme weather, sea-level rise, and mass extinction threaten our very survival.
And when Milton Friedman and Friedrich von Hayek revived classical liberalism, creating neoclassical liberalism or neoliberalism, they ignored this history. Indeed, quite against the facts of history Hayek argued in 1944 that redistribution of wealth lead inevitably to totalitarianism. And subsequent history has shown that this is not true.
Neoliberalism became the dominant political ideology of the world. Poverty decreased in the third world but increased in the first. Economic recessions came thick and fast, with the global financial crisis being the worst since the Great Depression. And government has been captured by a wealthy elite.
But worse, this time around, is the existential threat from the destruction that large corporations and governments have wrecked on the environment. Pollution, extreme weather, sea-level rise, and mass extinction threaten our very survival.
We abandoned classical liberalism because it didn't work. It still doesn't work in it's neoclassical form. And it's because Adam Smith and John Stuart Mill and others were fundamentally wrong about how human beings make decisions and about the fact of being a social primate. We need a new politics which takes into account what we now know about people.
"Those who cannot remember the past are condemned to repeat it."
– George Santayana
22 Apr 2019
Why Am I Not Anti-Capitalism
An old friend posted a video clip of George Monbiot on Frankie Boyle's TV show New World Order talking about the impending climate catastrophe.
But my friend, like me, finds anti-capitalist rhetoric unconvincing. He thought I might do a better job of explaining it, so here goes.
I think we have a problem in that people of George Monbiot's age and younger have never known a form of capitalism that is not Neoliberal. They have internalised this identification. The only prominent alternative to Neoliberalism is Chinese authoritarian socialism. And no one in their right might wants that for the UK. I agree that the system needs to change, but I don't think we should frame this as an attack on capitalism, I think we have to talk about Neoliberalism which goes deeper than economics.
What does this mean?
Liberalism is all about liberty. This is great, it has won us freedom of religion, and of speech, and to some extent freedom of economic opportunity. Liberty is clearly a good thing.
Classical Liberalism, the origin of the political right-wing, argued that government should not get in the way of any individual's economic activity. Let manufacturers manufacture, let traders trade. Which in principle is OK.
However, in practice this led to the widespread untrammeled exploitation of workers, to the general degradation of humanity, and very significantly to the French Revolution. Because in practice, without any checks and balances, the new industrialists treated people appallingly badly. Child labour, no equal pay, loads of deaths at work, squalid living conditions.
But of course they weren't all like that. The Cadbury Brothers in particular were not. They moved their factory to the edge of town where there was clean air and water, created a lovely little village for their workforce, and treated everyone with respect. Other Quaker businesses were also good employers. But on the whole the industrialists were monstrous. And the degradation is vividly portrayed in the novels of Charles Dickens.
Social liberalism aimed to level the playing field. Where socialists (the left-wing) would take care of people's needs, liberals want to help them to help themselves. You do this by giving them enough and no more. They argue that there is dignity in work. Except that economic liberal happily removes the dignity from work.
Liberalism was directly tied to the British Empire. John Stuart Mill, a key Liberal thinker worked for the East India Company. Imperialism required some intellectual justification. And there was already a nasty churning mess. Firstly Christianity saw all humanity as fundamentally flawed. People are sinners. People are bad. Workers, in particular are lazy. (See Mercantilism: Six Centuries of Vilifying the Poor). But this also became mixed with a version of Darwinism in which instead of apply to species evolution applied to individuals. The individual took centre stage in intellectual life after the Enlightenment. Romanticism reinforced this, and Mill also loved Wordsworth and Coleridge. Survival of the fittest started to look like a justification of Empire, or exploitation of workers and indigenous peoples. It seemed natural that the new ruling class of industrialists, the bourgeoisie as Marx called them, should be free to rule over others and exploit their labour, even to the point of owning slaves.
But Social Liberalism tempered the worst aspects of Classical Liberalism and was soon joined by a workable form of Socialism (at least in Europe - there are no real socialists in the USA). And this is how Classical Liberalism, what we would term the economic right (small government, free enterprise etc) came to be associated with the political left (looking after people in need). I think this clouds the picture. Certainly I have felt confused because I seemed to be a social liberal and yet I kept finding myself on the wrong side of debates, because actually I'm not a social liberal, I'm a libertarian socialist. The difference is brought out by the Political Compass website.
Neoliberalism arose as a response to a perceived attack on the American system of free enterprise. It involved a reassertion of the values of Classical Liberalism combined with some new twists, hence Neoclassical Liberalism or Neoliberalism. Read the Lewis Powell Memo to the American Chamber of Commerce in 1971 for and outline of this kind of thinking. Everything Powell suggested came to pass. For example, conservative businessmen bought up the media and used their wealth to leverage a take over the teaching of economics in universities. They bought chairs and founded schools. They employed the graduates in think tanks and as lobbyists. They imposed a monoculture on business studies in the USA and his caught on around the world. So now, all the journalists and critics have studied the same kind of economics as the politicians and have no effective critique of Neoliberalism. There are critiques, but they are ignored. And note that despite causing the global financial crisis, the curriculum in economics departments around the world has not changed.
In Neoliberalism the liberty of the individual is extended to the corporation which now has the same rights as a person. In this view the corporation should be free to engage in economic activity without interference from government. No environmental controls are desirable since they inhibit economic activity (this was a specific concern of Powell).
Also this is now linked to the idea of the economic market that embodies the micro-economic principle of supply and demand. However, Professor Steve Keen has pointed out that from around the time of the Lewis Powell Memo, the economics profession has known that the so-called law of supply and demand is bunk, but that's another story.
In this view if pollution is undesirable then the market will punish the polluter by reducing demand for their product. Alan Greenspan, long time Secretary of the US Treasury under successive presidents both Republican and Democrat (and personal disciple of the extremist philosopher Ayn Rand) refused to prosecute corrupt banks because he believed that the market would punish them. It did not and eventually we had the global financial crisis. And that crisis was not solved by the market. It was resolved by government. In the UK the government spent the equivalent of one year's GDP to prop up failing banks. The alternative was to watch the world's financial systems collapse leaving society in chaos.
Market forces depend on knowledge. If a polluter can hide their pollution or lie about the impact—as oil and tobacco companies have done for decades—then supply and demand breaks down as an effective mechanism. If the corrupt practices don't come to light or are defended as legitimate forms of economic activity—as happens in the housing and finance industry—then the market does nothing at all. Any imperfection in knowledge or human rationality causes the markets to malfunction. And the ignorance of consumers is a vast abyss because the same corporations who pollute and lie about it also control the media.
Oh, by the way, we've known that humans don't use reason to make decisions and choices for at least 50 years. Which is why adverts are now all about imagery and emotions rather than facts and information. All decisions involve emotional weighting of which information is salient to the decision. We have free will, but not as classically envisage, not countracausal free will that only relies on reason. We create reasons for our actions on the fly and only after the fact. (See Mercier and Sperber, The Enigma of Reason)
Neoliberalism, like all forms of liberalism is based on the idea of liberty. But proponents of liberty have always made exceptions. And those exceptions have often defined where liberals feel comfortable with violence. Citizens are free but immigrants are not. Soldiers can shoot foreigners but not citizens. Men can vote, but not women. Some of the men who wrote that "all men are created equal" owned slaves. Police target black people. A car may emit deadly toxins and carcinogens but a citizen may not smoke a little weed (for their own good). And so on.
The Liberals have always emphasised the aspects of liberty that most benefit the ruling elite, while occasionally mitigating for the disasters that this causes in society. So austerity increased poverty and homelessness in the UK from 2010 onwards, but hey, two men and now get married and rich people have a choice of which school their kids go to. Liberty, but within limits and almost always to benefit the elite - or at least not to discomfort them. Indeed one might argue that by allowing same-sex marriage secularists were really just thumbing their noses at the Church which has often been the enemy of liberty (especially in the days of Classical Liberalism).
Neoliberalism prioritised the liberty of corporation over the liberty of citizens. So if a corporation decides to cut down the Amazon rainforest, do fracking in Blackpool, or pour toxic waste into a river, then Neoliberalism says that impeding them is only justified if it does not affect the corporation's ability to make a profit. Our rights to clean air, water, and food are curtailed in favour of the rights of corporations to make a profit.
For example, at present as many as 38,000 people die each year in the UK from air pollution according to Public Health England, the government's own advisory board. Now of course every one deplores this loss of life. And some steps are been taken but on the other hand most large UK cities have illegal levels of pollution under EU law. And there is a good chance we'll lose that protection after Brexit. Air pollution is an accepted part of life. Just 272 stabbings in London in 2018 cause a huge public outcry, with the authoritarian arm of the media constantly feigning outrage. 90-100 people die every day (on average) from air pollution and there is extreme reluctance to curtail the main culprit: motor vehicles.
The rights of corporations override human rights, although not always. Still, corporations are always pushing the boundaries of how they can exploit workers and the environment. Many corporations behave in ways that if we encountered them in a person would constitute a mental illness.
Corporation that apparently lack empathy for example and exploit people for profit are like psychopaths. Indeed research shows that executives are more likely to have the mental characteristics of psychopaths. They lack empathy which would stop them from exploiting people through feeling their pain. Many high level politicians literally seem impervious to the emotions that we would normally expect to see in response to suffering.
This is why the picture of Jacinda Ardern, current PM of New Zealand, openly emoting caused a stir. We never see that in the UK. We have curiously unemotional people in power. In fact most of them give me the creeps.
This is what we have to fight against, but it's not capitalism per se. Capitalism is just the investment of surplus wealth in projects. By using their labour workers create further wealth that is shared between all parties: workers earn wages, investor earn profits, and landowners (resource owners) earn rent. And any surplus is reinvested. This is a Marxist definition, but it's as good as any.
There's nothing inherently bad about this. And framing what we want as an attack on Capitalism is counterproductive. We are not against investments and profits per se, I think, we are against corporations being able to override our human rights in pursuit of profit.
If we frame our fight as being with capitalism then we imply, for example that we want to end the concept of private property - this is a key Marxist policy. And how do we do this? Because people are not going to give up their property without a fight. We can nationalise some stuff, but not everything.
The problem is with how we are defining liberty and the exceptions we apply. The extension of rights to corporations which override human rights the first thing I would rescind. My first law would be no one is allowed to pollute. I can't just go next door and take a shit on my neighbour's lawn. There are no exceptions to this. And given that we mostly live in cities now, then some cooperative form of dealing with waste is necessary - sewers and treatment plants, yadda yadda.
But the output of treatment is a vast resource of nutrients we need for growing food. In medieval China, night soil collectors became very wealthy transporting the shit of Changan to the farmers outside the city. The population density inside the walls was greater than modern day Manhattan. Intensive farming was made possible be recycling human waste. Which is also why traditional Chinese cuisine does not involve raw food or salads. Cooking killed the fecal bacteria that were everywhere.
I agree with George Monbiot and Extinction Rebellion that the system is broken and that climate change is urgent. But we have to frame our response in ways that will help rather than hinder. And we have to be clear about the nature of the problem and the possible solutions.
We won't solve any problems through adopting authoritarian forms of government. Indeed one the problems we face is that governments cannot hear the people because they have industry lobbyists shouting in both ears. In my view, liberty has to apply to getting change. We cannot use force to achieve our aims. But we do need to be telling the truth, fighting the lies, and getting the government to take the problem seriously. We do need rapid change and to move our investments away from fossil fuels.
I'll end with this observation. One of the suggestions is that the UK rapidly stops using gas for cooking and heating. Presumably we'd extend to this to Western Europe if possible. However, if we rapidly degassed our economy then Russia and Ukraine would be bankrupt overnight. At the same time the repeated droughts are already affecting wheat crops, their other main export. 190 million people suddenly lose their main source of income at the same time their food supplies start to run out. Can anyone predict what they will do?
Every course we chose will have serious consequences at this point. And yet we must choose quickly and act quickly, because inaction will be the worst. American literary critic, Harold Bloom, dubbed this kind of dilemma the Hamlet Complex. We appear to be in the feigning madness part of the story.
I think we have a problem in that people of George Monbiot's age and younger have never known a form of capitalism that is not Neoliberal. They have internalised this identification. The only prominent alternative to Neoliberalism is Chinese authoritarian socialism. And no one in their right might wants that for the UK. I agree that the system needs to change, but I don't think we should frame this as an attack on capitalism, I think we have to talk about Neoliberalism which goes deeper than economics.
What does this mean?
Classical and Social Liberalism
Liberalism is all about liberty. This is great, it has won us freedom of religion, and of speech, and to some extent freedom of economic opportunity. Liberty is clearly a good thing.
Classical Liberalism, the origin of the political right-wing, argued that government should not get in the way of any individual's economic activity. Let manufacturers manufacture, let traders trade. Which in principle is OK.
However, in practice this led to the widespread untrammeled exploitation of workers, to the general degradation of humanity, and very significantly to the French Revolution. Because in practice, without any checks and balances, the new industrialists treated people appallingly badly. Child labour, no equal pay, loads of deaths at work, squalid living conditions.
But of course they weren't all like that. The Cadbury Brothers in particular were not. They moved their factory to the edge of town where there was clean air and water, created a lovely little village for their workforce, and treated everyone with respect. Other Quaker businesses were also good employers. But on the whole the industrialists were monstrous. And the degradation is vividly portrayed in the novels of Charles Dickens.
Social liberalism aimed to level the playing field. Where socialists (the left-wing) would take care of people's needs, liberals want to help them to help themselves. You do this by giving them enough and no more. They argue that there is dignity in work. Except that economic liberal happily removes the dignity from work.
Liberalism was directly tied to the British Empire. John Stuart Mill, a key Liberal thinker worked for the East India Company. Imperialism required some intellectual justification. And there was already a nasty churning mess. Firstly Christianity saw all humanity as fundamentally flawed. People are sinners. People are bad. Workers, in particular are lazy. (See Mercantilism: Six Centuries of Vilifying the Poor). But this also became mixed with a version of Darwinism in which instead of apply to species evolution applied to individuals. The individual took centre stage in intellectual life after the Enlightenment. Romanticism reinforced this, and Mill also loved Wordsworth and Coleridge. Survival of the fittest started to look like a justification of Empire, or exploitation of workers and indigenous peoples. It seemed natural that the new ruling class of industrialists, the bourgeoisie as Marx called them, should be free to rule over others and exploit their labour, even to the point of owning slaves.
But Social Liberalism tempered the worst aspects of Classical Liberalism and was soon joined by a workable form of Socialism (at least in Europe - there are no real socialists in the USA). And this is how Classical Liberalism, what we would term the economic right (small government, free enterprise etc) came to be associated with the political left (looking after people in need). I think this clouds the picture. Certainly I have felt confused because I seemed to be a social liberal and yet I kept finding myself on the wrong side of debates, because actually I'm not a social liberal, I'm a libertarian socialist. The difference is brought out by the Political Compass website.
Neoliberalism
Neoliberalism arose as a response to a perceived attack on the American system of free enterprise. It involved a reassertion of the values of Classical Liberalism combined with some new twists, hence Neoclassical Liberalism or Neoliberalism. Read the Lewis Powell Memo to the American Chamber of Commerce in 1971 for and outline of this kind of thinking. Everything Powell suggested came to pass. For example, conservative businessmen bought up the media and used their wealth to leverage a take over the teaching of economics in universities. They bought chairs and founded schools. They employed the graduates in think tanks and as lobbyists. They imposed a monoculture on business studies in the USA and his caught on around the world. So now, all the journalists and critics have studied the same kind of economics as the politicians and have no effective critique of Neoliberalism. There are critiques, but they are ignored. And note that despite causing the global financial crisis, the curriculum in economics departments around the world has not changed.
In Neoliberalism the liberty of the individual is extended to the corporation which now has the same rights as a person. In this view the corporation should be free to engage in economic activity without interference from government. No environmental controls are desirable since they inhibit economic activity (this was a specific concern of Powell).
Also this is now linked to the idea of the economic market that embodies the micro-economic principle of supply and demand. However, Professor Steve Keen has pointed out that from around the time of the Lewis Powell Memo, the economics profession has known that the so-called law of supply and demand is bunk, but that's another story.
In this view if pollution is undesirable then the market will punish the polluter by reducing demand for their product. Alan Greenspan, long time Secretary of the US Treasury under successive presidents both Republican and Democrat (and personal disciple of the extremist philosopher Ayn Rand) refused to prosecute corrupt banks because he believed that the market would punish them. It did not and eventually we had the global financial crisis. And that crisis was not solved by the market. It was resolved by government. In the UK the government spent the equivalent of one year's GDP to prop up failing banks. The alternative was to watch the world's financial systems collapse leaving society in chaos.
Market forces depend on knowledge. If a polluter can hide their pollution or lie about the impact—as oil and tobacco companies have done for decades—then supply and demand breaks down as an effective mechanism. If the corrupt practices don't come to light or are defended as legitimate forms of economic activity—as happens in the housing and finance industry—then the market does nothing at all. Any imperfection in knowledge or human rationality causes the markets to malfunction. And the ignorance of consumers is a vast abyss because the same corporations who pollute and lie about it also control the media.
Oh, by the way, we've known that humans don't use reason to make decisions and choices for at least 50 years. Which is why adverts are now all about imagery and emotions rather than facts and information. All decisions involve emotional weighting of which information is salient to the decision. We have free will, but not as classically envisage, not countracausal free will that only relies on reason. We create reasons for our actions on the fly and only after the fact. (See Mercier and Sperber, The Enigma of Reason)
Neoliberalism, like all forms of liberalism is based on the idea of liberty. But proponents of liberty have always made exceptions. And those exceptions have often defined where liberals feel comfortable with violence. Citizens are free but immigrants are not. Soldiers can shoot foreigners but not citizens. Men can vote, but not women. Some of the men who wrote that "all men are created equal" owned slaves. Police target black people. A car may emit deadly toxins and carcinogens but a citizen may not smoke a little weed (for their own good). And so on.
The Liberals have always emphasised the aspects of liberty that most benefit the ruling elite, while occasionally mitigating for the disasters that this causes in society. So austerity increased poverty and homelessness in the UK from 2010 onwards, but hey, two men and now get married and rich people have a choice of which school their kids go to. Liberty, but within limits and almost always to benefit the elite - or at least not to discomfort them. Indeed one might argue that by allowing same-sex marriage secularists were really just thumbing their noses at the Church which has often been the enemy of liberty (especially in the days of Classical Liberalism).
Neoliberalism prioritised the liberty of corporation over the liberty of citizens. So if a corporation decides to cut down the Amazon rainforest, do fracking in Blackpool, or pour toxic waste into a river, then Neoliberalism says that impeding them is only justified if it does not affect the corporation's ability to make a profit. Our rights to clean air, water, and food are curtailed in favour of the rights of corporations to make a profit.
For example, at present as many as 38,000 people die each year in the UK from air pollution according to Public Health England, the government's own advisory board. Now of course every one deplores this loss of life. And some steps are been taken but on the other hand most large UK cities have illegal levels of pollution under EU law. And there is a good chance we'll lose that protection after Brexit. Air pollution is an accepted part of life. Just 272 stabbings in London in 2018 cause a huge public outcry, with the authoritarian arm of the media constantly feigning outrage. 90-100 people die every day (on average) from air pollution and there is extreme reluctance to curtail the main culprit: motor vehicles.
The rights of corporations override human rights, although not always. Still, corporations are always pushing the boundaries of how they can exploit workers and the environment. Many corporations behave in ways that if we encountered them in a person would constitute a mental illness.
Corporation that apparently lack empathy for example and exploit people for profit are like psychopaths. Indeed research shows that executives are more likely to have the mental characteristics of psychopaths. They lack empathy which would stop them from exploiting people through feeling their pain. Many high level politicians literally seem impervious to the emotions that we would normally expect to see in response to suffering.
This is why the picture of Jacinda Ardern, current PM of New Zealand, openly emoting caused a stir. We never see that in the UK. We have curiously unemotional people in power. In fact most of them give me the creeps.
Conclusion
This is what we have to fight against, but it's not capitalism per se. Capitalism is just the investment of surplus wealth in projects. By using their labour workers create further wealth that is shared between all parties: workers earn wages, investor earn profits, and landowners (resource owners) earn rent. And any surplus is reinvested. This is a Marxist definition, but it's as good as any.
There's nothing inherently bad about this. And framing what we want as an attack on Capitalism is counterproductive. We are not against investments and profits per se, I think, we are against corporations being able to override our human rights in pursuit of profit.
If we frame our fight as being with capitalism then we imply, for example that we want to end the concept of private property - this is a key Marxist policy. And how do we do this? Because people are not going to give up their property without a fight. We can nationalise some stuff, but not everything.
The problem is with how we are defining liberty and the exceptions we apply. The extension of rights to corporations which override human rights the first thing I would rescind. My first law would be no one is allowed to pollute. I can't just go next door and take a shit on my neighbour's lawn. There are no exceptions to this. And given that we mostly live in cities now, then some cooperative form of dealing with waste is necessary - sewers and treatment plants, yadda yadda.
But the output of treatment is a vast resource of nutrients we need for growing food. In medieval China, night soil collectors became very wealthy transporting the shit of Changan to the farmers outside the city. The population density inside the walls was greater than modern day Manhattan. Intensive farming was made possible be recycling human waste. Which is also why traditional Chinese cuisine does not involve raw food or salads. Cooking killed the fecal bacteria that were everywhere.
I agree with George Monbiot and Extinction Rebellion that the system is broken and that climate change is urgent. But we have to frame our response in ways that will help rather than hinder. And we have to be clear about the nature of the problem and the possible solutions.
We won't solve any problems through adopting authoritarian forms of government. Indeed one the problems we face is that governments cannot hear the people because they have industry lobbyists shouting in both ears. In my view, liberty has to apply to getting change. We cannot use force to achieve our aims. But we do need to be telling the truth, fighting the lies, and getting the government to take the problem seriously. We do need rapid change and to move our investments away from fossil fuels.
I'll end with this observation. One of the suggestions is that the UK rapidly stops using gas for cooking and heating. Presumably we'd extend to this to Western Europe if possible. However, if we rapidly degassed our economy then Russia and Ukraine would be bankrupt overnight. At the same time the repeated droughts are already affecting wheat crops, their other main export. 190 million people suddenly lose their main source of income at the same time their food supplies start to run out. Can anyone predict what they will do?
Every course we chose will have serious consequences at this point. And yet we must choose quickly and act quickly, because inaction will be the worst. American literary critic, Harold Bloom, dubbed this kind of dilemma the Hamlet Complex. We appear to be in the feigning madness part of the story.
15 Apr 2019
Rethinking National Debt.
A short post on the Real-World Economics Review Blog has given me a new image for thinking about national debt. We have been taught by politicians who are either ignorant or mendacious to see the nations finances as like a household budget. We must live within our means. This is bullshit.
The Nation = Household analogy is bullshit because the household cannot issue its own currency or interest bearing bonds. A nation can borrow from its own citizens. And when it does, a nation guarantees the interest rate. It is typically low, but the risk of losing your investment for a wealthy country is almost nil - even if the economy is not doing well. This is important.
So let's consider a fictional household.
Rob worked hard and retired with a nice pension. But he and is wife Sue were used to being busy and after a couple of trips abroads started thinking about starting a business. Sue could make nifty widgets and Rob had all the skills necessary to turn widget-making into a business. But they needed seed money and didn't want to risk all of their own capital because they wanted their three kids, Jack, Sally, and Eve to inherit. So they decided they would borrow some money to finance their start up.
SCENARIO ONE
Rob borrowed money from The Bank. He borrowed $100,000 at 10% interest, payable monthly and based on the amount owed at the beginning of the year (real banks use more complex formulas).
In this scenario the business breaks even after 5 years and pays back the original loan in 10. The bank gets its $100,000 back and another $100,000 in interest. So not counting the profits from the business, the family have paid $100,000 to a bank in rent for the money they used. That money did not cost the bank anything to create and most of the admin is done automatically by computers. A staff member spent an hour on it at the start, but the rest was all handed by automated payments. So The Bank makes a healthy profit and pays out high salaries to executives and dividends to investors.
There is a net loss to the family of $100,000. This is what concerns people about national debt.
SCENARIO TWO
Same family except this time Rob borrows the money from his grown up kids. Jack has a high paying job and $25,000 in savings. Sally has $5,000, and Eve has $15,000. They get the balance of $55,000 from The Bank.
Rob and Sue agree to pay out the same interest rates to their kids so the over all sums are the same. In total $100,000 of interest is paid. But now some of it goes back to the kids - their capital is increased. As they are now investors, the kids also get a share of the profits as they go so again their capital increases as a result of the investment. And they all still stand to inherit the original nest egg.
However, they realise that the kids who invest least will benefit least. They know they need an employee so they offer Sally the job. Now Sally gets a little interest, some dividend, but she also gets wages paid for out of profits. So her share, boasted by investing her labour, goes up considerably compared to just a small investment of capital.
Scenario One is Bullshit spread by Neoliberal psychopaths.
Scenario One has been extraordinary influential in public debate. This is what people think happens. The trouble is that it isn't. Politicians have sold this image because it justifies their economic liberalism agenda. This is the kind of libertarianism that aims to liberate business from the constraints of the state; to allow them to make unfettered profits with no concern over the broader consequences (such as environmental degradation or climate change).
One problem is that such businesses routinely resort to oppression and violence to achieve their profits. Unfettered such businesses would resort to using slave labour or sweatshops. They would not pay a wage on which anyone could live. Workers would have no protections. This is part of what is driving the right-wing Brexit project - the EU is protectionist and requires the UK to treat its workers better than Tories think they should be.
The other problem that we have seen is that businesses are like children. Without clear boundaries they will routinely operate in ways that are immoral. And even with clear boundaries they will constantly be testing them and pushing the envelope. Amazon are perhaps the best known example of this. They monitor productivity on a minute scale so that they get the maximum work from a worker, with no consideration for the impact this has on workers. They'd obviously much prefer to employ robots or slaves but the technology is not yet flexible enough to make it cost effective.
The prosecution of corruption in the finance industry has been devilishly complex and slow. Sometimes immoral practices, such as betting that tranches of high risk mortgages (wrongly been approved as safe investments) would fail to be repaid enmasse, turned out not to be illegal. But there was plenty of knowing illegal behaviour as well, such as manipulating interest international rates.
How can businesses that are run by adults behave with childlike immorality? This is a complex question but it does seem that people who do well in business tend to score highly on measures of psychopathy. In other words they lack interest in the lives of other people. It's not that they lack the ability to experience empathy. They do know how other people feel, but they just don't care. That thousands of people lost their life savings and their homes in the global financial crash does not illicit compassion or sympathy.
More recently we have seen how Big Oil use their vast wealth to lie about climate change and inhibit our ability to respond to it on a national level. Like Big Tobacco, the oil companies knew about the harm being caused by their product but continued to deny it. But more than this they spend billions each year lobbying politicians and trying to impede any attempt to prevent climate change.
The "childlike" analogy is quite generous. Business is a Lord of the Flies situation (although I rather think that the children involved were modelled on English public schoolboys and that is hardly universal). Indeed it might be better to see businesses as predatory psychopaths who have to be regulated, surveilled, and policed or they run amok. Not all of them, but enough that it could result in the enslavement or death of much of the population if we did not intervene.
So libertarianism when it comes to business is a very bad idea indeed. And these are the people who are telling us that the nation's finances are like our household finances.
Scenario Two is simplistic, but a better reflection of reality.
The second scenario, while still an over-simplification and probably a bit Pollyanna-ish, gives a better idea of what government borrowing is like. Japan, for example, has very high government debt, but it is almost entirely owed to Japanese citizens rather than to banks or foreign governments. In the blog post mentioned above, Lars Syll makes the point that in this case the Japanese people pay their taxes to pay off the debt to the Japanese people. What is the net effect for Japan? Syll argues that it is zero. I.e. that when Japanese pay tax it is going to the Japanese state which benefits Japanese people.
I don't think it is quite zero however, because there is some inequity built into this model. All citizens pay tax. With the prevalence of indirect taxes such as sales tax (VAT, GST, etc) everyone pays tax, even those who do not pay income tax. But not everyone has the surplus wealth required to buy government bonds. Those who invest more of their wealth in the government and get a greater share of the taxes than others. By this I mean that everyone benefits from things like roads and other national infrastructure that tax pays for. But bond holders get a personal share of the tax revenue as interest. There is a net transfer of wealth from the poor to the wealthy.
This is why the government needs to create jobs. In the scenario I made the parents employ their daughter to illustrate how to make things a bit fairer. By employing people the government helps to redistribute the benefits of national wealth to people who would not otherwise get it.
Some opponents of this model argue that government is inefficient. But in highly privatised Britain we've seen any number of cases of private sector inefficiency or outright incompetence. Our train system is a case in point. Fare structures are incomprehensible, train stock is deteriorating, and in some areas the service is appallingly bad. Delayed maintenance in order to make a profit after having underbid to get the contract has become a serious problem in many sectors. For example, the roads where I live are a mess and as a cyclist I really notice this!
One of the reasons that governments do things poorly is that they are chronically underfunded in regimes with low taxation. But that is a whole other story.
Conclusion
National debt is certainly not unimportant. But it is very far from being as important as Neoliberals make out. Their ideology calls for zero government interference in business. Government investing in the nation, financed by borrowing from the nation, is seen as interference. But it is moronic to think we can do without this.
In fact Keynes showed, and it is still true, that for best results the government and the private sector have to work in tandem. When there is a slump in the private sector, the government takes up the slack. And when the private sector is booming then the government can focus on paying down debt.
The major problem we have in the world today is private debt, both the private business sector and households. Earlier this month it was announced that household spending outstripped household income for the 9th quarter in a row.
The levels of private debt are leading to chronically slow demand which leads to low growth. Growth is becoming a controversial topic these days, but GDP growth can be drive by increased efficiency which might lead to lower emissions. And any transition to a zero or negative growth system will have to be funded somehow.
Attempts by government to reduce spending at this time are only making the problem worse. An example close to my heart is that cuts to welfare have a negative overall impact. People who rely on welfare tend to live hand to mouth. We spend all that we get in local shops. If you cut what we spend then that means less is spent in local shops. Local shops spend less at wholesalers. Wholesalers buy less from suppliers. Over all less tax is collected and it has a negative impact on the deficit.
Contrarily if you increase welfare spending it is all spent locally. The local shops do more business and pay more tax. They buy more from the wholesaler who also does better and pays more tax. And so on. Much of the welfare spend makes its way back to the government in taxes. But it also stimulates the economy by increasing demand. While the poor people on welfare might spend on small items, the shopkeepers and wholesalers buy bigger ticket items. It also creates jobs because the retail, wholesale, supplier chain is busier. More jobs means more tax revenue.
The big problem with high levels of private debt is that it leads to what Richard Koo calls a balance sheet recession. At some point the interest bill on the debt becomes intolerable. At that point, instead of using surplus income to buy luxuries, people start paying down debt instead. If they all do that around the same time then it sends demand plummeting and causes a recession - overall economic activity shrinks, workers are made redundant, tax revenues fall, and so on.
One of the dangers for the private sector is deflation - when wages and prices start to fall. When this happens the value of debt goes up. That is to say, if there is deflation when you are in debt, it is the same as taking on more debt.
In any case we need to change the tune on national debt. We need to banish the chequebook metaphor or the household budget metaphor. Although people easily understand this the analogy is false, the reasoning is false, and the outcome is confusion about what is needed.
National debt is like borrowing from your family when you know that you have plenty of cash coming in to pay them back. It's a good investment. The interest stays in the family. And the principle stays in the family.
The Nation = Household analogy is bullshit because the household cannot issue its own currency or interest bearing bonds. A nation can borrow from its own citizens. And when it does, a nation guarantees the interest rate. It is typically low, but the risk of losing your investment for a wealthy country is almost nil - even if the economy is not doing well. This is important.
So let's consider a fictional household.
Rob worked hard and retired with a nice pension. But he and is wife Sue were used to being busy and after a couple of trips abroads started thinking about starting a business. Sue could make nifty widgets and Rob had all the skills necessary to turn widget-making into a business. But they needed seed money and didn't want to risk all of their own capital because they wanted their three kids, Jack, Sally, and Eve to inherit. So they decided they would borrow some money to finance their start up.
SCENARIO ONE
Rob borrowed money from The Bank. He borrowed $100,000 at 10% interest, payable monthly and based on the amount owed at the beginning of the year (real banks use more complex formulas).
In this scenario the business breaks even after 5 years and pays back the original loan in 10. The bank gets its $100,000 back and another $100,000 in interest. So not counting the profits from the business, the family have paid $100,000 to a bank in rent for the money they used. That money did not cost the bank anything to create and most of the admin is done automatically by computers. A staff member spent an hour on it at the start, but the rest was all handed by automated payments. So The Bank makes a healthy profit and pays out high salaries to executives and dividends to investors.
There is a net loss to the family of $100,000. This is what concerns people about national debt.
SCENARIO TWO
Same family except this time Rob borrows the money from his grown up kids. Jack has a high paying job and $25,000 in savings. Sally has $5,000, and Eve has $15,000. They get the balance of $55,000 from The Bank.
Rob and Sue agree to pay out the same interest rates to their kids so the over all sums are the same. In total $100,000 of interest is paid. But now some of it goes back to the kids - their capital is increased. As they are now investors, the kids also get a share of the profits as they go so again their capital increases as a result of the investment. And they all still stand to inherit the original nest egg.
However, they realise that the kids who invest least will benefit least. They know they need an employee so they offer Sally the job. Now Sally gets a little interest, some dividend, but she also gets wages paid for out of profits. So her share, boasted by investing her labour, goes up considerably compared to just a small investment of capital.
Discussion
Scenario One is Bullshit spread by Neoliberal psychopaths.
Scenario One has been extraordinary influential in public debate. This is what people think happens. The trouble is that it isn't. Politicians have sold this image because it justifies their economic liberalism agenda. This is the kind of libertarianism that aims to liberate business from the constraints of the state; to allow them to make unfettered profits with no concern over the broader consequences (such as environmental degradation or climate change).
One problem is that such businesses routinely resort to oppression and violence to achieve their profits. Unfettered such businesses would resort to using slave labour or sweatshops. They would not pay a wage on which anyone could live. Workers would have no protections. This is part of what is driving the right-wing Brexit project - the EU is protectionist and requires the UK to treat its workers better than Tories think they should be.
The other problem that we have seen is that businesses are like children. Without clear boundaries they will routinely operate in ways that are immoral. And even with clear boundaries they will constantly be testing them and pushing the envelope. Amazon are perhaps the best known example of this. They monitor productivity on a minute scale so that they get the maximum work from a worker, with no consideration for the impact this has on workers. They'd obviously much prefer to employ robots or slaves but the technology is not yet flexible enough to make it cost effective.
The prosecution of corruption in the finance industry has been devilishly complex and slow. Sometimes immoral practices, such as betting that tranches of high risk mortgages (wrongly been approved as safe investments) would fail to be repaid enmasse, turned out not to be illegal. But there was plenty of knowing illegal behaviour as well, such as manipulating interest international rates.
How can businesses that are run by adults behave with childlike immorality? This is a complex question but it does seem that people who do well in business tend to score highly on measures of psychopathy. In other words they lack interest in the lives of other people. It's not that they lack the ability to experience empathy. They do know how other people feel, but they just don't care. That thousands of people lost their life savings and their homes in the global financial crash does not illicit compassion or sympathy.
More recently we have seen how Big Oil use their vast wealth to lie about climate change and inhibit our ability to respond to it on a national level. Like Big Tobacco, the oil companies knew about the harm being caused by their product but continued to deny it. But more than this they spend billions each year lobbying politicians and trying to impede any attempt to prevent climate change.
The "childlike" analogy is quite generous. Business is a Lord of the Flies situation (although I rather think that the children involved were modelled on English public schoolboys and that is hardly universal). Indeed it might be better to see businesses as predatory psychopaths who have to be regulated, surveilled, and policed or they run amok. Not all of them, but enough that it could result in the enslavement or death of much of the population if we did not intervene.
So libertarianism when it comes to business is a very bad idea indeed. And these are the people who are telling us that the nation's finances are like our household finances.
Scenario Two is simplistic, but a better reflection of reality.
The second scenario, while still an over-simplification and probably a bit Pollyanna-ish, gives a better idea of what government borrowing is like. Japan, for example, has very high government debt, but it is almost entirely owed to Japanese citizens rather than to banks or foreign governments. In the blog post mentioned above, Lars Syll makes the point that in this case the Japanese people pay their taxes to pay off the debt to the Japanese people. What is the net effect for Japan? Syll argues that it is zero. I.e. that when Japanese pay tax it is going to the Japanese state which benefits Japanese people.
I don't think it is quite zero however, because there is some inequity built into this model. All citizens pay tax. With the prevalence of indirect taxes such as sales tax (VAT, GST, etc) everyone pays tax, even those who do not pay income tax. But not everyone has the surplus wealth required to buy government bonds. Those who invest more of their wealth in the government and get a greater share of the taxes than others. By this I mean that everyone benefits from things like roads and other national infrastructure that tax pays for. But bond holders get a personal share of the tax revenue as interest. There is a net transfer of wealth from the poor to the wealthy.
This is why the government needs to create jobs. In the scenario I made the parents employ their daughter to illustrate how to make things a bit fairer. By employing people the government helps to redistribute the benefits of national wealth to people who would not otherwise get it.
Some opponents of this model argue that government is inefficient. But in highly privatised Britain we've seen any number of cases of private sector inefficiency or outright incompetence. Our train system is a case in point. Fare structures are incomprehensible, train stock is deteriorating, and in some areas the service is appallingly bad. Delayed maintenance in order to make a profit after having underbid to get the contract has become a serious problem in many sectors. For example, the roads where I live are a mess and as a cyclist I really notice this!
One of the reasons that governments do things poorly is that they are chronically underfunded in regimes with low taxation. But that is a whole other story.
Conclusion
National debt is certainly not unimportant. But it is very far from being as important as Neoliberals make out. Their ideology calls for zero government interference in business. Government investing in the nation, financed by borrowing from the nation, is seen as interference. But it is moronic to think we can do without this.
In fact Keynes showed, and it is still true, that for best results the government and the private sector have to work in tandem. When there is a slump in the private sector, the government takes up the slack. And when the private sector is booming then the government can focus on paying down debt.
The major problem we have in the world today is private debt, both the private business sector and households. Earlier this month it was announced that household spending outstripped household income for the 9th quarter in a row.
The levels of private debt are leading to chronically slow demand which leads to low growth. Growth is becoming a controversial topic these days, but GDP growth can be drive by increased efficiency which might lead to lower emissions. And any transition to a zero or negative growth system will have to be funded somehow.
Attempts by government to reduce spending at this time are only making the problem worse. An example close to my heart is that cuts to welfare have a negative overall impact. People who rely on welfare tend to live hand to mouth. We spend all that we get in local shops. If you cut what we spend then that means less is spent in local shops. Local shops spend less at wholesalers. Wholesalers buy less from suppliers. Over all less tax is collected and it has a negative impact on the deficit.
Contrarily if you increase welfare spending it is all spent locally. The local shops do more business and pay more tax. They buy more from the wholesaler who also does better and pays more tax. And so on. Much of the welfare spend makes its way back to the government in taxes. But it also stimulates the economy by increasing demand. While the poor people on welfare might spend on small items, the shopkeepers and wholesalers buy bigger ticket items. It also creates jobs because the retail, wholesale, supplier chain is busier. More jobs means more tax revenue.
The big problem with high levels of private debt is that it leads to what Richard Koo calls a balance sheet recession. At some point the interest bill on the debt becomes intolerable. At that point, instead of using surplus income to buy luxuries, people start paying down debt instead. If they all do that around the same time then it sends demand plummeting and causes a recession - overall economic activity shrinks, workers are made redundant, tax revenues fall, and so on.
One of the dangers for the private sector is deflation - when wages and prices start to fall. When this happens the value of debt goes up. That is to say, if there is deflation when you are in debt, it is the same as taking on more debt.
In any case we need to change the tune on national debt. We need to banish the chequebook metaphor or the household budget metaphor. Although people easily understand this the analogy is false, the reasoning is false, and the outcome is confusion about what is needed.
National debt is like borrowing from your family when you know that you have plenty of cash coming in to pay them back. It's a good investment. The interest stays in the family. And the principle stays in the family.
13 Apr 2019
Political Dichotomies
I've been a conscientious objector against Neoliberalism for a while now. More especially since coming across Simon Springer's article Fuck Neoliberalism a few years ago. But I confess I have been a bit puzzled by term liberal this whole time. Some of my attitudes seem to coincide with the word "liberal", while some of them are clearly not aligned. A well-known psychology professor and self-appointed lifestyle guru describes himself as a "traditional liberal" but he and I disagree on almost everything. But then I am not a conservative either. Somehow these labels didn't make sense of my views.
I recently took the political compass test again and once again came out strongly on both the left and libertarian ends of the scale - close to where they place Noam Chomsky.
PC use a double axis: left-right with an entirely state planned economy on the left and an entirely free-market economy with no government regulation on the right. Their other access is authoritarian-libertarian. The extreme libertarian end any collectivism is voluntary and there is no state. The other end is where the state controls everything. They mark the four corners with exemplars: Stalin in the top left (authoritarian communism), Pinochet in the top right (authoritarian free-market), Anarchists in the bottom left (libertarian socialism), and Milton Friedman on the bottom right
But I have no interest in a command economy and nor, I suspect, does Chomsky. Neither of us is under an illusion about the disasters of Stalinism or Maoism. What Chomsky and I favour is the state taking a role in preventing psychopathic corporations (and government departments) from killing people, enslaving them, oppressing them in any way; or polluting air, water, or land, and from causing irreparable harm to the environment. To me this is the minimum needed for long term survival. I don't shit where I eat. I don't see the state telling corporations what to produce or how much. I'm not particularly in favour of protectionism or trade barriers. I think free trade encourages peace. I don't think the free movement of capital is quite so benign.
On the other hand I prefer that same state leave people to live their private lives pretty much as they like. While some social rules are best encoded as laws and policed (prohibitions on murder, assault, rape, and so on) other decisions are best left to adults (who I love, marry, etc, how I spend my leisure time). I think we have many laws to prevent us winning Darwin Awards although all too often stupid people take others with them.
I would say that I favour regulated Capitalism that retained rewards and incentives for innovation and entrepreneurial activities. Where Capitalism is used in the generic sense of people investing their surplus wealth in projects that create jobs. Just that any progress cannot come at a cost to workers lives, health, or well being.
Of course we have some very serious problems right now. We have to think about the possibility that runaway climate change might disrupt our ability to feed ourselves and thus tear apart the fabric of society. Even if we manage to avoid the worst case scenario (though we're not doing nearly enough for that) then we still have problems. The idea of constant economic growth is predicated on some false assumptions. However, I still think we need Capitalism (i.e. the investment of surplus wealth) to get us out of the mess we're in. And if the worst does happen then none of this will matter and no one will read it in 20 years time anyway.
What I want to try to deal with it how terms like liberal, progressive, or conservative fit into this scheme. What about nationalist or populist?
Around the time I retook the Political Compass test, I was drawn into the silly argument about Hitler being a "socialist". Other people countered by saying he was obviously right-wing. Political compass make Hitler a centrist in economic terms. He was big on privatisation but also the Nazi state was huge, especially the military, and controlling. Hitler was not an extremist on the left-right axis. He was an extreme authoritarian. He's a 10 on that axis. Indeed what he called "socialism" was in fact the idea that all Germans should think only of the needs of, and sacrifice everything for, the German state. One of the great models for Fascism was the Romantic philosophy of Johann Gottlieb Fichte (1762-1814) who said "the individual does not exist...the group alone exists". The Nazi's were socialist the way that North Korea are democratic. But they weren't as right wing as most people seem to think. Far less so than most modern Prime Ministers of the UK or Presidents of the USA (including most Democrats).
One thing to say to Americans is that all your mainstream politicians are on the economic right. To call anyone who has been in power there a communist is just laughable. Even someone AOC with her Green New Deal is barely even a socialist from where I sit on the political spectrum. The Green New Deal is Capitalism which does fuck the people or planet. We've just forgotten that Capitalism doesn't need to be the kind of scorched-earth approach of Neoliberalism.
I got to thinking about all these labels and this is what I came up with.
Liberalism: economic vs social
Economic liberalism is all about freeing Capitalists to make a profit with no regulation or oversight. It resists protection for workers in terms of wages and conditions. It sees labour as an overhead. It is linked to the rhetoric of "free enterprise" in which everyone is technically free to participate in the marketplace. In reality there is no level playing field. Some people inherit huge wealth while others inherit none. Some are members of social classes that give each other a helping hand into power: the classic case of boys who go to Eton and Oxford, through an unpaid internship in Parliament, to a safe parliamentary seat, to the cabinet, and then high office. They may be talented but they get pushed to the front of the queue because they are part of the incrowd. The vast majority of talented people are shut out because they are not connected. Another term for economic liberalism is mercantilism.
In practice economic liberalism leads to the oppression of workers and at worse to their enslavement. For example since Tories took power the security of work has declined through zero hours contracts and the gig economy, while in-work poverty has grown year on year. In doublespeak this is trumpeted as record low levels of unemployment.
Social liberalism is virtually unrelated to economic liberalism. Social liberalism is focussed on freeing citizens from oppressive regulation by the state and is thus related to libertarianism. A good example if the liberalisation of laws against homosexuality leading up to the institution of marriage being opened to same-sex couples. Same-sex marriage was achieved under the same government in the UK that squeezed workers and made swinging cuts to welfare and health (both presented in double-speak as record levels of investment in welfare and health).
In terms of the Political Compass diagram economic liberalism is on the right-hand edge, while social liberalism is at the bottom. They are orthogonal to each other. That's why the discussion about liberalism is so confusing.
Progressive vs Conservative
Liberalism is sometimes confused with being progressive. In fact the axis of progressivism and conservatism seems to me to be completely separate.
Progressives want to pursue change, while conservatives are comfortable with the status quo. Although we often associate these poles with economic left/right distinctions this is deceptive.
For example, the old guard soviet communists were social and economic conservatives resisting change while Gorbachev was a social and economic progressive who instituted change. None of them were particularly socially or economically liberal. The change was a further step away from the Totalitarianism of Stalin's era towards more personal freedom. However, it was also a march towards the right as markets opened up. And of course this process was ultimately corrupted so that most of the state assets ended up in the hands of a cabal of oligarchs who run mafia-like entities with help from the ex-KGB President.
On the other hand right-wing politicians do often pursue change. Thatcher and Reagan for example were socially conservative, but both were radically progressive economically. The two leaders instituted wide ranging transformation of their respective economies.
Of course there were social in both cases there were consequent social changes, but they were not part of a deliberate policy in most cases. Indeed one of the flagship policies of social conservatism in the USA was mandatory minimum sentences and three strike rules which saw the prison population triple in the space of a couple of decades. The USA now imprisons a higher proportion of its citizens than any other developed nation. Mostly for minor non-violent drug offences. But once a convict always a ex-con and many doors are closed to them.
Contrary to the popular narrative much of the left-wing is socially conservative and want to, for example, preserve and strengthen protections for workers. And much of the right-wing are currently progressive in seeking small government and further privatisation. It is many decades since the Conservative Party of the UK (aka the Tories) was aptly named. Every time they get into power they usher in sweeping changes. The radical element of the Tories have driven the UK's exit from the EU.
Markets
As I said, Political Compass, put me way over on the left. This implies that I would be in favour of massive state intervention, but this is deceptive. It doesn't capture the nuances of my politics.
This morning someone called Diane Abbott (Labour MP) a "Stalinist" on the news. Apart from the fact that this kind of smeer is just a cheap political stunt what's notable about this is that she has the largest parliamentary majority in the house. She is incredibly popular in her own constituency which has a high proportion of "black" families, partly because she is herself "black" (I remain deeply uncomfortable with the whole black/white language of ethnicity but it is what is current here in the UK). Ms Abbott is a lightning rod for racism and sexism - she gets more online abuse than all the other women in parliament put together. She was called a "Stalinist" because she did not publicly denounce Julian Assange. But publicly denouncing political prisoners in lieu of a criminal trial is exactly what happened in Stalin's Russia, so this is the pot calling the kettle black (no racial reference intended here).
The tired old cliche is that we have just two choices: extreme free market economics which turns people into Soylent Green, or Stalinism. That is the far top-left and the far bottom-right of the Political Compass grid. Except that our UK and US governments for decades occupied the top-right, i.e. authoritarian right-wing, quadrant. Which is not one of the choices in the false dichotomy.
Stalin and Mao ran command economies which were centrally controlled and often disastrous as a result of poor information and communication. At worst both leaders caused huge famines which killed millions. On the other hand Pinochet ran Chile as an extreme free market experiment and killed anyone that got in the way.
But not all left-wing people favour a command economy. I don't for example. Indeed most nominally socialist countries (prior to the virus of Neoliberalism) have never employed command economies. They limited the damage that any company could do but largely let them get on with it.
The Scandinavians for example have never taken the Stalinist approach. What they did was centralise public services such as the provision of infrastructure, health, and education and provide a very high standard across the board. The cost of this was high taxation. This produced the highest overall standards of living in the world and provided a genuinely level social playing field. By any measure the Scandinavian countries were prosperous and well. Their industries were vigorous and successful. Brands like Volvo, Ikea, and Absolute are famous the world over for good reasons.
There are plenty of other options. Had we adopted some of them in place of Neoliberalism in the 1970s we might not be facing the end of civilisation right now. Deregulation of business along with the failure of oversight and internal and external governance is one of the main reasons we now face runaway climate change. Neoliberalism has fucked us.
Neoliberalism
This reflection was partly sparked by a comment after I tweeted the slogan: "Under the economic liberalism, liberals seek to enslave workers; under the social liberalism, to emancipate them." Neoliberalism is literally the new liberalism. But it has always struck me as completely illiberal. This is because Neoliberalism is a form of economic liberalism, not a form of social liberalism.
Neoliberalism started out as a form of progressive economic liberalism. It emerged as a violent reaction to social liberalism, especially in the USA, on the part of socially conservative businessmen (as outlined in the Lewis Powell Memo). Now it is the status quo so arguments in favour of it come from conservatives.
Interestingly the Republicans managed to co-opt socially conservative fundamentalist Christians to their economically liberal program in the 1980s. This despite the fact that most fundamentalists are poor working people who have done poorly Neoliberalis. President Trump continues to pander to this constituency through his policies toward Israel, though as I say I believe he has taken a leap to the left with his trade wars and protectionism.
Neoliberalism is able to simulate social liberalism in the form of choices. Choice of suppliers not only stimulates competition (survival of the fittest) but it also creates the illusion of freedom. People in prison are given the choice of 100 TV channels and convinced that this represents real freedom despite being behind bars. Such choices are merely ersatz freedom.
Also notable Neoliberalism has seen the emancipation of homosexuals. While the is lingering ill-will for homosexuals in some sections of society (misnamed "homophobia") they cannot be legally discriminated against, they can hold high public office, and of high symbolic value they can marry. This more genuinely socially liberal. But it cost the Neoliberals nothing in terms of their economics. It wasn't a quid pro quo.
Some Neoliberals make a big deal about the reduction in world poverty. As far as I can see this program of uplift is not motivated by compassion. It is motivated by the desire to create new consumers. it is only by raising poor people up that they can begin to participate in consumerism. If you go to India what you see is poor people drowning in cheap plastic shit. Any gains in prosperity are offset by choking air pollution, the illness from lack of clean water and sewerage, and the lasting poverty that followed colonisation by the British. Ironically, though they are hated more, the Muslim Mughals were often better overlords than the British East India Company.
Make no mistake the introduction of Neoliberalism was a deliberate revolution. It was backed by intellectuals, funded by business men, and enacted by politicians. I'm not a Feminist, but we can say that this was the last throw of the dice for the patriarchy because Neoliberalism was as much as anything about stupid fucking white men clinging to power.
Unfortunately it looks like the end of Neoliberalism will probably coincide with the end of civilisation. There's a good chance that we are past the point of no return and that climate change is now going to snow ball. Although it will mostly involve melting of snow and ice. The ability of a few rich men to manipulate the world has existed in many empires. The current empires are modeled on the East India Company - one does not send and army to conquer another country, one sends lawyers, salesmen, public-relations people, and above all financiers. But introducing Africa to debt, for example, financiers took control of the entire continent. In the 1980s the entire continent when bankrupt. This was repeated in South America, in South East Asia, in Japan, and finally in 2008 in Europe and America.
And still we have not realised that we have been conquered by a foreign power. Just because Goldman-Sachs et al don't have a national flag we should not be fooled into thinking that they are not a vicious and rapacious imperial power.
Together such powers are killing us all. The rich hope to survive the collapse of civilisation in closed communities. But can you imagine a new civilisation made up entirely of psychopaths who destroyed the world for more wealth than they could spend in 100 lifetimes? What happens to a social species when the only members left lack the capacity for empathy?
I recently took the political compass test again and once again came out strongly on both the left and libertarian ends of the scale - close to where they place Noam Chomsky.
PC use a double axis: left-right with an entirely state planned economy on the left and an entirely free-market economy with no government regulation on the right. Their other access is authoritarian-libertarian. The extreme libertarian end any collectivism is voluntary and there is no state. The other end is where the state controls everything. They mark the four corners with exemplars: Stalin in the top left (authoritarian communism), Pinochet in the top right (authoritarian free-market), Anarchists in the bottom left (libertarian socialism), and Milton Friedman on the bottom right
But I have no interest in a command economy and nor, I suspect, does Chomsky. Neither of us is under an illusion about the disasters of Stalinism or Maoism. What Chomsky and I favour is the state taking a role in preventing psychopathic corporations (and government departments) from killing people, enslaving them, oppressing them in any way; or polluting air, water, or land, and from causing irreparable harm to the environment. To me this is the minimum needed for long term survival. I don't shit where I eat. I don't see the state telling corporations what to produce or how much. I'm not particularly in favour of protectionism or trade barriers. I think free trade encourages peace. I don't think the free movement of capital is quite so benign.
On the other hand I prefer that same state leave people to live their private lives pretty much as they like. While some social rules are best encoded as laws and policed (prohibitions on murder, assault, rape, and so on) other decisions are best left to adults (who I love, marry, etc, how I spend my leisure time). I think we have many laws to prevent us winning Darwin Awards although all too often stupid people take others with them.
I would say that I favour regulated Capitalism that retained rewards and incentives for innovation and entrepreneurial activities. Where Capitalism is used in the generic sense of people investing their surplus wealth in projects that create jobs. Just that any progress cannot come at a cost to workers lives, health, or well being.
Of course we have some very serious problems right now. We have to think about the possibility that runaway climate change might disrupt our ability to feed ourselves and thus tear apart the fabric of society. Even if we manage to avoid the worst case scenario (though we're not doing nearly enough for that) then we still have problems. The idea of constant economic growth is predicated on some false assumptions. However, I still think we need Capitalism (i.e. the investment of surplus wealth) to get us out of the mess we're in. And if the worst does happen then none of this will matter and no one will read it in 20 years time anyway.
What I want to try to deal with it how terms like liberal, progressive, or conservative fit into this scheme. What about nationalist or populist?
Around the time I retook the Political Compass test, I was drawn into the silly argument about Hitler being a "socialist". Other people countered by saying he was obviously right-wing. Political compass make Hitler a centrist in economic terms. He was big on privatisation but also the Nazi state was huge, especially the military, and controlling. Hitler was not an extremist on the left-right axis. He was an extreme authoritarian. He's a 10 on that axis. Indeed what he called "socialism" was in fact the idea that all Germans should think only of the needs of, and sacrifice everything for, the German state. One of the great models for Fascism was the Romantic philosophy of Johann Gottlieb Fichte (1762-1814) who said "the individual does not exist...the group alone exists". The Nazi's were socialist the way that North Korea are democratic. But they weren't as right wing as most people seem to think. Far less so than most modern Prime Ministers of the UK or Presidents of the USA (including most Democrats).
One thing to say to Americans is that all your mainstream politicians are on the economic right. To call anyone who has been in power there a communist is just laughable. Even someone AOC with her Green New Deal is barely even a socialist from where I sit on the political spectrum. The Green New Deal is Capitalism which does fuck the people or planet. We've just forgotten that Capitalism doesn't need to be the kind of scorched-earth approach of Neoliberalism.
I got to thinking about all these labels and this is what I came up with.
Liberalism: economic vs social
Under the economic liberalism, liberals seek to enslave workers; under the social liberalism, to emancipate them.It's a question of who is free to do what. Orwellian doublespeak has only confused the situation.
Economic liberalism is all about freeing Capitalists to make a profit with no regulation or oversight. It resists protection for workers in terms of wages and conditions. It sees labour as an overhead. It is linked to the rhetoric of "free enterprise" in which everyone is technically free to participate in the marketplace. In reality there is no level playing field. Some people inherit huge wealth while others inherit none. Some are members of social classes that give each other a helping hand into power: the classic case of boys who go to Eton and Oxford, through an unpaid internship in Parliament, to a safe parliamentary seat, to the cabinet, and then high office. They may be talented but they get pushed to the front of the queue because they are part of the incrowd. The vast majority of talented people are shut out because they are not connected. Another term for economic liberalism is mercantilism.
In practice economic liberalism leads to the oppression of workers and at worse to their enslavement. For example since Tories took power the security of work has declined through zero hours contracts and the gig economy, while in-work poverty has grown year on year. In doublespeak this is trumpeted as record low levels of unemployment.
Social liberalism is virtually unrelated to economic liberalism. Social liberalism is focussed on freeing citizens from oppressive regulation by the state and is thus related to libertarianism. A good example if the liberalisation of laws against homosexuality leading up to the institution of marriage being opened to same-sex couples. Same-sex marriage was achieved under the same government in the UK that squeezed workers and made swinging cuts to welfare and health (both presented in double-speak as record levels of investment in welfare and health).
In terms of the Political Compass diagram economic liberalism is on the right-hand edge, while social liberalism is at the bottom. They are orthogonal to each other. That's why the discussion about liberalism is so confusing.
Progressive vs Conservative
Liberalism is sometimes confused with being progressive. In fact the axis of progressivism and conservatism seems to me to be completely separate.
Progressives want to pursue change, while conservatives are comfortable with the status quo. Although we often associate these poles with economic left/right distinctions this is deceptive.
For example, the old guard soviet communists were social and economic conservatives resisting change while Gorbachev was a social and economic progressive who instituted change. None of them were particularly socially or economically liberal. The change was a further step away from the Totalitarianism of Stalin's era towards more personal freedom. However, it was also a march towards the right as markets opened up. And of course this process was ultimately corrupted so that most of the state assets ended up in the hands of a cabal of oligarchs who run mafia-like entities with help from the ex-KGB President.
On the other hand right-wing politicians do often pursue change. Thatcher and Reagan for example were socially conservative, but both were radically progressive economically. The two leaders instituted wide ranging transformation of their respective economies.
Of course there were social in both cases there were consequent social changes, but they were not part of a deliberate policy in most cases. Indeed one of the flagship policies of social conservatism in the USA was mandatory minimum sentences and three strike rules which saw the prison population triple in the space of a couple of decades. The USA now imprisons a higher proportion of its citizens than any other developed nation. Mostly for minor non-violent drug offences. But once a convict always a ex-con and many doors are closed to them.
Contrary to the popular narrative much of the left-wing is socially conservative and want to, for example, preserve and strengthen protections for workers. And much of the right-wing are currently progressive in seeking small government and further privatisation. It is many decades since the Conservative Party of the UK (aka the Tories) was aptly named. Every time they get into power they usher in sweeping changes. The radical element of the Tories have driven the UK's exit from the EU.
Markets
As I said, Political Compass, put me way over on the left. This implies that I would be in favour of massive state intervention, but this is deceptive. It doesn't capture the nuances of my politics.
This morning someone called Diane Abbott (Labour MP) a "Stalinist" on the news. Apart from the fact that this kind of smeer is just a cheap political stunt what's notable about this is that she has the largest parliamentary majority in the house. She is incredibly popular in her own constituency which has a high proportion of "black" families, partly because she is herself "black" (I remain deeply uncomfortable with the whole black/white language of ethnicity but it is what is current here in the UK). Ms Abbott is a lightning rod for racism and sexism - she gets more online abuse than all the other women in parliament put together. She was called a "Stalinist" because she did not publicly denounce Julian Assange. But publicly denouncing political prisoners in lieu of a criminal trial is exactly what happened in Stalin's Russia, so this is the pot calling the kettle black (no racial reference intended here).
The tired old cliche is that we have just two choices: extreme free market economics which turns people into Soylent Green, or Stalinism. That is the far top-left and the far bottom-right of the Political Compass grid. Except that our UK and US governments for decades occupied the top-right, i.e. authoritarian right-wing, quadrant. Which is not one of the choices in the false dichotomy.
Stalin and Mao ran command economies which were centrally controlled and often disastrous as a result of poor information and communication. At worst both leaders caused huge famines which killed millions. On the other hand Pinochet ran Chile as an extreme free market experiment and killed anyone that got in the way.
But not all left-wing people favour a command economy. I don't for example. Indeed most nominally socialist countries (prior to the virus of Neoliberalism) have never employed command economies. They limited the damage that any company could do but largely let them get on with it.
The Scandinavians for example have never taken the Stalinist approach. What they did was centralise public services such as the provision of infrastructure, health, and education and provide a very high standard across the board. The cost of this was high taxation. This produced the highest overall standards of living in the world and provided a genuinely level social playing field. By any measure the Scandinavian countries were prosperous and well. Their industries were vigorous and successful. Brands like Volvo, Ikea, and Absolute are famous the world over for good reasons.
There are plenty of other options. Had we adopted some of them in place of Neoliberalism in the 1970s we might not be facing the end of civilisation right now. Deregulation of business along with the failure of oversight and internal and external governance is one of the main reasons we now face runaway climate change. Neoliberalism has fucked us.
Neoliberalism
This reflection was partly sparked by a comment after I tweeted the slogan: "Under the economic liberalism, liberals seek to enslave workers; under the social liberalism, to emancipate them." Neoliberalism is literally the new liberalism. But it has always struck me as completely illiberal. This is because Neoliberalism is a form of economic liberalism, not a form of social liberalism.
Neoliberalism started out as a form of progressive economic liberalism. It emerged as a violent reaction to social liberalism, especially in the USA, on the part of socially conservative businessmen (as outlined in the Lewis Powell Memo). Now it is the status quo so arguments in favour of it come from conservatives.
Interestingly the Republicans managed to co-opt socially conservative fundamentalist Christians to their economically liberal program in the 1980s. This despite the fact that most fundamentalists are poor working people who have done poorly Neoliberalis. President Trump continues to pander to this constituency through his policies toward Israel, though as I say I believe he has taken a leap to the left with his trade wars and protectionism.
Neoliberalism is able to simulate social liberalism in the form of choices. Choice of suppliers not only stimulates competition (survival of the fittest) but it also creates the illusion of freedom. People in prison are given the choice of 100 TV channels and convinced that this represents real freedom despite being behind bars. Such choices are merely ersatz freedom.
Also notable Neoliberalism has seen the emancipation of homosexuals. While the is lingering ill-will for homosexuals in some sections of society (misnamed "homophobia") they cannot be legally discriminated against, they can hold high public office, and of high symbolic value they can marry. This more genuinely socially liberal. But it cost the Neoliberals nothing in terms of their economics. It wasn't a quid pro quo.
Some Neoliberals make a big deal about the reduction in world poverty. As far as I can see this program of uplift is not motivated by compassion. It is motivated by the desire to create new consumers. it is only by raising poor people up that they can begin to participate in consumerism. If you go to India what you see is poor people drowning in cheap plastic shit. Any gains in prosperity are offset by choking air pollution, the illness from lack of clean water and sewerage, and the lasting poverty that followed colonisation by the British. Ironically, though they are hated more, the Muslim Mughals were often better overlords than the British East India Company.
Make no mistake the introduction of Neoliberalism was a deliberate revolution. It was backed by intellectuals, funded by business men, and enacted by politicians. I'm not a Feminist, but we can say that this was the last throw of the dice for the patriarchy because Neoliberalism was as much as anything about stupid fucking white men clinging to power.
Unfortunately it looks like the end of Neoliberalism will probably coincide with the end of civilisation. There's a good chance that we are past the point of no return and that climate change is now going to snow ball. Although it will mostly involve melting of snow and ice. The ability of a few rich men to manipulate the world has existed in many empires. The current empires are modeled on the East India Company - one does not send and army to conquer another country, one sends lawyers, salesmen, public-relations people, and above all financiers. But introducing Africa to debt, for example, financiers took control of the entire continent. In the 1980s the entire continent when bankrupt. This was repeated in South America, in South East Asia, in Japan, and finally in 2008 in Europe and America.
And still we have not realised that we have been conquered by a foreign power. Just because Goldman-Sachs et al don't have a national flag we should not be fooled into thinking that they are not a vicious and rapacious imperial power.
Together such powers are killing us all. The rich hope to survive the collapse of civilisation in closed communities. But can you imagine a new civilisation made up entirely of psychopaths who destroyed the world for more wealth than they could spend in 100 lifetimes? What happens to a social species when the only members left lack the capacity for empathy?
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